Keep Your Promises statement on Chemours Quarterly Earnings Call

Tomorrow, Chemours will discuss its financial performance during its first Quarterly Earnings Call since the completion of the spinoff from DuPont (listeners can access the call by visiting investors.chemours.com).

Chemours is vital to the economic future of mid-Ohio Valley communities and to the health of residents affected by C-8 contamination. As we outlined in detail in our June Investor Briefing, Chemours is a company saddled with massive debt, exposure to billions of dollars in lawsuits and remediation obligations, mounting defense costs related to ongoing litigation, and declining profitability and cash flow. When combined with the downturn in the Ti02 market, a cornerstone of Chemours’ business, the company is faced with a bleak outlook. We expect that streamlining and restructuring, which will be announced on this call, will lead to job and benefits cuts.

Chemours will seek to sugarcoat these facts, but no amount of coating will hide the dire consequences for the mid-Ohio Valley if Chemours is not forced to answer for these issues.

“We encourage elected representatives, business leaders, and local mid-Ohio Valley press to listen in and ensure that the issues that directly impact the health and economy of our community are addressed, “ said Dr. Paul Brooks, Advisor to Keep Your Promises Dupont.

These issues are:

Will Chemours pay its full committed dividend to shareholders this quarter?According to multiple reports, it appears that the dividend level set by DuPont for Chemours before the spinoff will be difficult for the new company to fulfill. Chemours’ failure to pay this dividend would speak volumes about the financial viability of the company, and the question still remains.

Chemours should clarify its stance on the C-8 Leach litigation in light of the two decisions that recently came out of federal court. It is Chemours’ legal obligation to accrue for the costs of the over 3,500 C-8 cases that hang in the balance. Recent decisions from Judge Sargus prevent DuPont and Chemours from contesting specific causation in C-8 cases, which would have decreased their liabilities in the Leach case. Chemours should be preparing for much higher costs in light of these decisions, and the company should demonstrate how it is accruing for these higher costs.

Chemoursshould address the impending regulatory changes that EPA is slated to release in the near future pertaining to acceptable levels of C-8 in drinking water. Based on recent scientific reports, we expect that EPA’s standard could be significantly lower than the standard established in the Leach settlement. The result would be a much larger area of impact, opening the company up to vast new liabilities as well as significantly larger clean up costs in dozens of water districts in the mid-Ohio Valley.

Chemours and/or DuPont should release a full list detailing sites requiring remediation now or in the future. Various financial analyst reports have now identified the uncertainty around liabilities as a significant issue affecting Chemours. Starting in the 1980s and updated since then, under the direction of Martha Rees, who is now DuPont’s Chief Environmental Counsel, DuPont compiled a comprehensive study of sites and liabilities that could provide more certainty about the extent of potential future liabilities inherited by Chemours as part of the spinoff. The Rees Report has never been released, but it would provide a greater level of certainty to those concerned about Chemours’ exposure to liabilities.

The significance of these issues cannot be overstated. Long an economic foundation of this community, DuPont has now effectively abandoned the mid-Ohio Valley and left significant damage in its wake. The issues highlighted above exacerbate that damage.

Further, DuPont left in its place Chemours, a new company saddled with an enormous amount of debt for which it has not accrued sufficient funds. In short, it appears that Chemours will be not a viable company when the full extent of liabilities is realized.

We encourage you to participate in tomorrow’s Quarterly Earnings Call to ensure that these issues are addressed.

Menu

Campaign Partnership

The Keep Your Promises campaign was developed in partnership with the Action Network Fund, a nonprofit organization that empowers citizens to stand up for their communities and their livelihoods in the face of corporate abuse.